Market Scenario
The
world is experiencing a transition in energy systems with increased
focus on advanced methods of power generation, energy efficiency, and
carbon emissions reduction. Moreover, the energy system is growing in
terms of generation source by having decentralized systems from a
singular generation source. Governments, across the world, are also
supporting decentralized energy systems as it keeps the market
competitive and energy demand is also fulfilled. For instance, Germany,
has enacted the CHP Act since January 2016, for promoting CHP
technology, among domestic consumers. It provides funding for the
electricity generated by the cogeneration plants. Combined Heat and
power (CHP) technology is a well-established method of generating
electricity and thermal heat, simultaneously, from the same source. The
technology is gaining more attention from the fact that the energy
produced through cogeneration offers up to 80% efficiency. According to
research, around 8% of the total electricity generated is from the
cogeneration plants.
Micro-combined
heat and power (MCHP) is a next-generation power solution,
particularly, defined for small size cogeneration plants. MCHP is
capable of meeting the demand for space heating or cooling in buildings,
accompanied by the capability of fulfilling the demand for electricity,
which can replace the need for grid supply. The main output of the MCHP
systems is heat with some electricity generation, at a typical ratio of
6:1 (heat to electricity). The buildings that include residential and
commercial infrastructure contributed to around 21% of the total energy
consumption, in 2015. As mentioned in the definition of Energy
Efficiency Directive of European Union, MCHP technology is appropriate
to be applied in residential, public and commercial buildings to supply a
range of heat and electricity usage. The greatest advantage that MCHP
offers is their small size, which is the same as of the domestic
boilers, thus, can be installed anywhere in the buildings. Other
benefits served by the MCHP technology include carbon savings, balancing
renewables, job creation through electricity generation, and empowering
energy consumers.
The
market for MCHP is supported by the facts such as the strive for cost
efficient and competitive energy systems, focus on carbon reduction from
power generating systems, and the continuous support from governments
through incentives and subsidies. MCHP systems are capable to generate
electricity and heat with up to 80% efficiency whereas the coal based
power plant has an operational efficiency of maximum 35%. Additionally,
since the MCHP systems are installed near to the end use points, the
transmission and heat losses are minimal. This drives the demand for
MCHP systems over the conventional power generation methods. Besides,
MCHP systems are helpful in reduction of carbon footprints, which is a
major concern today with increasing climate change. According to the
study conducted by decentralized energy organization, an engine-based
MCHP system unit can save 1.7 tons of carbon dioxide, annually, for
domestic purposes, and a solid oxide fuel cell (SOFC) is able to save
more than 4 tons of carbon dioxide, per year. However, infrastructural
hurdles faced in maintenance of MCHP systems is hampering the global
market for MCHP.
Global
MCHP market has been segmented on the basis of type, technology,
application and region. Based on type, the market is further classified
as engine based and fuel-cell based. The fuel-cell based segment is
expected to dominate the market due to increased focus on fuel cell
technology and its benefits over the conventional power generation
systems. The engine based MCHP has power generation capacity of 1 kWh,
while the fuel-cell based MCHP can generate up to 2kWh of power and has
an electrical output of more than 65% efficiency. Segregating the
technology segment, the sub-segments are internal combustion engine,
PEMFC, Rankine cycle engine, Stirling engine, and SOFC. Amongst these,
Stirling engine and SOFC segments are the most successful technology
segments due to their capacity of saving more carbon footprint and
greater operational efficiency than rest of the sub-segments. Based on
application, the market is further segmented as residential and
commercial. Commercial segment accounts for the largest segments, due to
funding and incentives provided by the government to install the MCHP
systems. Also, the unused electricity generated, can be sold back to the
grid, through which the commercial segments make profits, thus
contributing the largest market share.
The global MCHP market is expected to progress at ~15.5% CAGR during the forecast period
Global MCHP Market
Global
MCHP market is expected to witness massive growth during the forecast
period due to increasing demand for power and focus on reduction of
carbon footprints. The governments are also supporting the installation
of MCHP system, which further enhances the growth of market. Europe is
the one of the leading regions in the MCHP market with the increasing
concern for clean and efficient energy systems. Besides, the weather
conditions in Europe are most of the times cold, thus there is a high
demand for heating from the residential and commercial buildings. This
leads to growth of MCHP systems market from the region. For an instance,
the European Union has implemented Energy Efficiency Directive at
country level that promotes MCHP market by increasing CHP projects,
while promoting demand response and simplifying grid connection
procedures for MCHP installations. Moreover, Asia Pacific is likely to
be the fastest growing region, owing to increasing demand for power from
the developing countries and Japanese companies are increasing their
sales of MCHP systems, thus becoming prominent vendors in the market.
According to Delta EE organization, in 2015, 14% of the global MCHP
sales are in Europe and the rest of the sales are in Japan. This makes
Asia Pacific, the largest market share holding region in the global MCHP
market.
Key Players
Some
of the key players of global MCHP market are Honda Power (Japan),
Vaillant Group (Germany), Yanmar Holdings Co. Ltd. (Japan), Ceres Power
Holdings PLC (U.K), Qnergy (U.S.), Aisin Group (Japan), BDR Thermea
Group (U.K), Centrica plc (U.K), Mondragon Corporation (Spain),
Viessmann Group (Germany), Dantherm Power (Denmark), Nucusa Energy
(U.S.), and Solid Power (U.S.).
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